ment of a pulp and paper industry, the forests of southeastern Alaska 

 offer unUmited resources of lumber — Sitka spruce, hemlock and yellow 

 cedar. The movement of lumber from this area is increasing steadily, and 

 now constitutes a considerable portion of the southbound haul. Worthy of 

 note is the fact that practically all of the spruce airplane requirements 

 of the Allied air forces during the war came from the Sitka spruce stands 

 in the Tongass National Forest. 



Although the Alaska Transportation Company does not at present 

 operate a passenger service, their plans contemplate the acquisition of 

 passenger equipment, which should help to develop one of Alaska's great- 

 est potentialities. The recreational features of the country, when made 

 available by adequate steamship service, will furnish a large volume of 

 passenger traffic. Although Alaska is an American territory, and there- 

 fore considered a protected domestic trading area, there is heavy passenger 

 competition from Canadian lines which operate between Vancouver and 

 southeastern Alaska and now carry some 75,000 persons to Alaska an- 

 nually. Almost all these passengers are tourists from the United States, 

 who would probably prefer to sail under the American flag if proper 

 service were available. 



There is a real need here for passenger vessels, which under present- 

 day construction costs require some form of government subsidy. But still 

 another problem confronts water transportation to Alaska — that of labor- 

 management relations, which must be stabilized before ultimate depend- 

 ability can be assured to the Alaskan seaways, and so to the development 

 of the vast resources of the Territory. 



37 



